Peabody Energy announced today that it will cease production at its Wilkie Creek Mine and close the site by the end of 2013. Located in Queensland's Surat Basin, Wilkie Creek supplies thermal coal for coal-fired power stations.
A release from Peabody said approximately 200 employees and contractors at the mine have been notified of the closure. Peabody’s Australia President Charles Meintjes said the company would work with employees on relocation to other operations where possible.
The St. Louis based coal major has made several dramatic cuts to its workforce over the past year, citing a challenging global market. In 2013, global coal prices have maintained a downward trend overall, in part due to oversupply as production continues to outpace consumption.
Stricter environmental regulations and associated carbon taxes have also had an impact on the company. According to The Australian, a Peabody representative said that while Australia’s carbon tax was not the main cost burden, it had played a part.
"The decision to close Wilkie Creek has been made in response to a broad combination of lower market prices and higher costs," the unnamed spokeswoman told the source. "Whilst the carbon tax was not a primary cause of the closure, it represents a substantial burden on an export-driven mine."
Peabody Energy is the world's largest private-sector coal company, serving metallurgical and thermal coal customers in more than 25 countries on six continents. As a leading coal producer and reserve holder in Australia, Peabody currently runs 11 operations in Queensland and New South Wales.